Oneok (NYSE:OKE) said Sunday it agreed to acquire Magellan Midstream Partners (NYSE:MMP) in a cash and stock deal valued at ~$18.8B including assumed debt, resulting in a combined company with a $60B total enterprise value.
The consideration will consist of $25/share in cash and 0.667 common share of Oneok (OKE) for each outstanding Magellan (MMP) common unit, representing a current implied value to each Magellan unitholder of $67.50/unit for a 22% premium based on the May 12 closing price.
Oneok (OKE) said it expects the deal to be earnings accretive beginning in 2024, with EPS accretion of 3%-7% per year during 2025-27 and free cash flow per share accretion averaging more than 20% during 2024-27; base synergies are expected to total at least $200M/year.
The combined company will own 25K-plus miles of liquids-oriented pipelines, with significant assets and operational expertise at the Gulf Coast and Mid-Continent market hubs.
Oneok (OKE) expects the combined portfolio will present significant potential for enhanced customer product offerings and increased international export opportunities, which it said could result in total annual transaction synergies exceeding $400M within 2-4 years.
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